SHREVEPORT, La., May 4, 2007 – American Electric Power’s (NYSE: AEP) Southwestern Electric Power Company (SWEPCO) has awarded The Shaw Group Inc. (NYSE: SGR) of Baton Rouge, La. the engineering, procurement and construction (EPC) contract to build the John W. Turk, Jr. Power Plant, a new 600-megawatt (MW) coal-fueled power plant at Fulton, Ark., in Hempstead County near Texarkana. SWEPCO is seeking the necessary regulatory approvals to build the plant from various Arkansas, Texas and Louisiana authorities.
When regulatory approval is received, the plant will be built using ultra-supercritical pulverized coal combustion technology. Operating with higher steam pressures and temperatures, the plant will require less fuel per megawatt hour of electricity generated than traditional coal-fired plants, resulting in increased efficiency and reduced emissions. The Turk Plant, named for a former SWEPCO president, is scheduled to be completed in mid-2011 at a total cost of about approximately $1.3 billion. Shaw’s EPC contract is valued at approximately $700 million.
"The EPC agreement with Shaw marks another important milestone that will ensure timely completion of the project,” said Venita McCellon-Allen, SWEPCO’s president and chief operating officer. “The Turk plant will bring much needed generation to the Ark-La-Tex, allow us to remain a low cost energy provider and boost regional economic development efforts in the area.” The Turk Plant construction is expected to create up to 1,400 construction jobs.
SWEPCO serves over 464,000 customers in three states: 112,000 in western Arkansas, 176,000 in Northwest Louisiana, and 176,000 in East and North Texas. News releases and other information about SWEPCO can be found on the World Wide Web at http://swepco.com
The Shaw Group Inc. is a leading global provider of technology, engineering, procurement, construction, maintenance, fabrication, manufacturing, consulting, remediation, and facilities management services for government and private sector clients in the energy, chemical, environmental, infrastructure, and emergency response markets. A Fortune 500 company with nearly $5 billion in annual revenues, Shaw is headquartered in Baton Rouge, La., and employs approximately 21,000 people at its offices and operations in North America, South America, Europe, the Middle East and the Asia-Pacific region. For further information, please visit Shaw’s website at www.shawgrp.com
American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than 5 million customers in 11 states. AEP ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined. AEP’s transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern states and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas. AEP’s utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east and north Texas). AEP’s headquarters are in Columbus, Ohio.
This report made by AEP and its Registrant Subsidiaries contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Although AEP and each of its Registrant Subsidiaries believe that their expectations are based on reasonable assumptions, any such statements may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. Among the factors that could cause actual results to differ materially from those in the forward-looking statements are: electric load and customer growth; weather conditions, including storms; available sources and costs of, and transportation for, fuels and the creditworthiness of fuel suppliers and transporters; availability of generating capacity and the performance of AEP’s generating plants; AEP’s ability to recover regulatory assets and stranded costs in connection with deregulation; AEP’s ability to recover increases in fuel and other energy costs through regulated or competitive electric rates; AEP’s ability to build or acquire generating capacity when needed at acceptable prices and terms and to recover those costs through applicable rate cases or competitive rates; new legislation, litigation and government regulation including requirements for reduced emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter and other substances; timing and resolution of pending and future rate cases, negotiations and other regulatory decisions (including rate or other recovery for new investments, transmission service and environmental compliance); resolution of litigation (including pending Clean Air Act enforcement actions and disputes arising from the bankruptcy of Enron Corp. and related matters); AEP’s ability to constrain operation and maintenance costs; the economic climate and growth in AEP’s service territory and changes in market demand and demographic patterns; inflationary and interest rate trends; AEP’s ability to develop and execute a strategy based on a view regarding prices of electricity, natural gas and other energy-related commodities; changes in the creditworthiness of the counterparties with whom AEP has contractual arrangements, including participants in the energy trading market; actions of rating agencies, including changes in the ratings of debt; volatility and changes in markets for electricity, natural gas and other energy-related commodities; changes in utility regulation, including the potential for new legislation or regulation in Ohio and membership in and integration into regional transmission organizations; accounting pronouncements periodically issued by accounting standard-setting bodies; the performance of AEP’s pension and other postretirement benefit plans; prices for power that AEP generates and sell at wholesale; changes in technology, particularly with respect to new, developing or alternative sources of generation; other risks and unforeseen events, including wars, the effects of terrorism (including increased security costs), embargoes and other catastrophic events.